CHULA VISTA  A Chula Vista boatyard successfully bid in December to take over a competing operation in National City that went bankrupt, but the Port of San Diego may hold up the deal at its meeting Tuesday.

Port officials, who administer state tidelands, are citing concerns about the financial wherewithal of Chula Vista-based Marine Group Boat Works to settle the debts incurred by National City-based Knight & Carver Maritime.

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Executives for Marine Group say the port is trying to block the company’s $3 million expansion into the National City facility — in the hopes of forcing Marine Group to move its operations off the Chula Vista waterfront, where the port is planning a major revilatization project.

The port initially celebrated when Marine Group won the bid to take over for Knight & Carver, because it meant the bankrupt company’s debts would be paid off — including $263,000 in back rent due to the port.

Now port asset manager Adam Meyer says in a staff report that Marine Group hasn’t shown evidence it will be able to clean up the site and pay off the debts.

Knight & Carver owes about $6 million to creditors, many of them San Diego businesses, said John Smaha, an attorney representing the business.

Marine Group Boat Works employs about 120 people and generates about $30 million in revenue annually.

Company vice president Todd Roberts says the port’s money concern is baseless, because his business has a long and successful history on the bayfront. If the company’s financial statements weren’t enough, Roberts said, its owners also offered their personal assets to guarantee the success of the purchase.

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“We control four or five different port leases, and never once have we defaulted,” Roberts said. “We’re the most successful megayacht repair operation on the west coast.”

He said the real reason port staff are blocking the sale is that Marine Group Boat Works won’t agree to relocate in order to clear the shipyard from the bayfront, adjacent to the redevelopment planned for Chula Vista.

“They said that part of the deal is we need to move (from Chula Vista) to the National City site whenever the port tells us to,” Roberts explained.

That would be infeasible, he said, because the National City boatyard, at 450,000 square feet of land and water, is about half the size of Marine Group’s Chula Vista yard. It is also in severe disrepair, which would mean costly renovations before it’s usable.

“For us to move, it’s about a $7 million to $10 million venture, which could very well run us out of business,” Roberts said.

When Marine Group would not agree to amend its Chula Vista lease with the new relocation requirement, Roberts said, port officials withdrew their support for the purchase of the National City boatyard.

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“The port district is trying to use the leverage of the National City transaction to force the tenant to do something else in Chula Vista,” Roberts said.

The cost to taxpayers, creditors, boatyard workers and the port would be steep if the sale doesn’t go through, Roberts added.

“All the people at Knight & Carver that we were going to hire would lose their jobs, and the money we were going to use to pay the creditors — they wouldn’t get a dime, and the port wouldn’t get their money either,” he said.

The port issued a statement declaring that the conditions the port placed on the lease are reasonable, “and thus far, the company has not complied with those requests.”

Roberts said he fears that even without the sale, the port will still force Marine Group Boat Works to relocate.

The company expected it might one day have to move to the boatyard in National City should it become available, Roberts said, but not for another 10 years or so when the lease was up, and not at Marine Group’s expense.

He said it’s frustrating that the port is not willing to approve Marine Group Boat Works doing business in National City on a lease unless he compromises his company’s ability to do business in Chula Vista.

“This is all being driven by this amazing desire to get rid of the boatyard in Chula Vista for the alleged development of the bayfront,” Roberts said. “It’s a constant battle for our survival.”

The California Coastal Commission approved a 556-acre comprehensive master plan last year to redevelop the bayfront into a world-class tourism destination. The plans include housing, hotels, shopping, restaurants, public parks, and a resort conference center that would be adjacent to the existing boatyard.

If the port does not approve the sale, Knight & Carver’s attorney said he has hearings set up in bankruptcy court that might help the deal go through anyway. Ideally, he said, the port and Marine Group Boat Works can come to an agreement instead.